An analysis from the market research firm Counterpoint Research has estimated that Apple’s most expensive smartphone — the iPhone 14 Pro Max — costs $454 (around ~£372) in terms of raw materials.
While that figure is notably a long way short of the iPhone 14 Pro Max’s £1,199 UK starting price, it’s important to note that it factors in only the cost of raw components, bought in bulk volumes.
The blended bill of materials cost analysis by Counterpoint doesn’t consider the expense of assembly, packaging, distribution and marketing — not to mention the huge research-and-development costs associated with modern smartphone manufacturing.
Only Apple knows the amount it spends on each of these things, but we can gain a rough approximation thanks to the company’s own data. In its first quarterly earnings report of the year, Apple reported that its products’ overall gross margin was 37 per cent. While this isn’t broken down by each device, it’s likely in that ballpark for the iPhone 14 Pro Max too.
But while the numbers don’t help to assess the value of a smartphone, they do reveal how much of a technological leap each generation is — at least in terms of dollars and cents.
As many would suspect, the difference between the iPhone 14 Pro Max and its predecessor isn’t that great. Counterpoint Research says that the $454 figure represents a 3.4 per cent increase in the price of materials from 2021’s flagship iPhone 13 Pro Max, with the upgrade to a 48MP camera and always-on display being the main culprits.
That’s marginal compared with 2020, Counterpoint says. The jump from iPhone 11 to iPhone 12 led to the cost of materials rising by 26 per cent thanks to the long-awaited introduction of 5G.
If UK buyers are looking for a reason to be aggrieved by Apple’s pricing, however, there is one bone of contention. While US buyers saw no price change between the iPhone 13 and 14, on this side of the Atlantic early adopters had to pay up to £150 more.
